Citigroup Predicts $1.6T Stablecoin Market by 2030, Driven by 2025 Regulatory Shifts

Citigroup has predicted that blockchain technology could be on the verge of a significant breakthrough, with its adoption potentially mirroring the rapid rise of ChatGPT in the artificial intelligence sector. This prediction is based on the growing acceptance and integration of stablecoins into the financial system, which Citigroup analysts believe could be driven by regulatory changes in 2025.

The report from Citigroup suggests that the total market capitalization of stablecoins could reach $1.6 trillion by 2030 in a base case scenario, or as high as $3.7 trillion in a more optimistic outlook. Currently, the stablecoin market stands at approximately $240 billion, indicating a potential for substantial growth over the next few years. This expansion is expected to be fueled by increased adoption in both the financial and public sectors, supported by clearer regulatory frameworks.

Citigroup's analysts highlighted that regulatory clarity, particularly in the US, will be a key factor in the broader acceptance of stablecoins. A regulatory framework for stablecoins in the US could enable greater integration of these digital assets into the existing financial system, supporting demand for dollar-denominated risk-free assets both within and outside the US. This could lead to stablecoin issuers holding significant amounts of US Treasuries or comparable low-risk assets as collateral, potentially surpassing the holdings of any single jurisdiction today.

Despite the optimistic outlook, Citigroup also acknowledged potential challenges. The stablecoin market cap could settle around $500 billion if adoption and integration hurdles persist. Additionally, depegging events, where stablecoins lose their peg to the underlying asset, could pose risks. Such events could dampen crypto market liquidity, trigger automated liquidations, and have broader contagion effects on the financial system. The report cited 1,900 depegging instances in 2023, including the major USDC depeg following the collapse of Silicon Valley Bank.

Citigroup's analysis positions stablecoins as a central component of blockchain's evolution from a speculative asset class to a practical financial infrastructure. The report suggests that 2025 could be a pivotal year for blockchain technology, with regulatory changes facilitating significant adoption across various sectors. This moment is likened to the rapid acceptance of ChatGPT, indicating a potential tipping point for blockchain's integration into mainstream finance and public use.